Imf Chief Issues Warning On Dollar`s Rise

BERLIN — The managing director of the International Monetary Fund warned Thursday that the dollar`s rise may delay progress in reducing international trade imbalances.

Michael Camdessus was careful to underline the benefits of the relative stability of foreign exchange markets this year. He added, however, that the dollar`s upward move could not be considered a desirable development.

He said the trend will make it more difficult to reduce the U.S. balance of payments deficit.

Camdessus` concern is understood to be based on the fund`s latest economic projections, which suggest that, assuming present policies and exchange rates, the U.S. current-account deficit will level out at $130 billion in 1989 and then begin to rise again.

His comments, before the opening of the fund`s annual meeting in Berlin, are thought to reflect growing concern within the organization that the strong improvement in the U.S. trade position during the last few months will not be sustained next year.

The Federal Reserve and the Bundesbank, its West German counterpart, intervened in foreign exchange markets Thursday as the dollar firmed against the mark. The Fed intervened in New York after the dollar rose above 1.88 marks after the White House denied rumors that President Reagan had had a heart attack.

After the intervention, the dollar did an about-face.

Dan Holland, a vice president at Discount Corp. in New York, said because the market was thin, ``it didn`t take much to turn the dollar around.``

In New York, the dollar rose to 134.69 yen from 134.29 Wednesday. It closed at 1.8763 marks, up from 1.8745.

Trading the yen remained largely sluggish because of the illness of Japanese Emperor Hirohito.

``When (he) dies, Tokyo will shut down the markets for two days, and then it will be difficult to close one`s yen positions,`` said a dealer at a U.S. bank in Frankfurt.

Camdussus` comments are likely to provoke considerable irritation within the Reagan administration, which insisted at a meeting of high-level officials last week that the fund`s projections were far too pessimistic.

They also provide an awkward backdrop to a meeting Saturday of finance ministers and central bankers of the Group of 7, which is expected to reaffirm a commitment to maintaining exchange rates in their current ranges.

The seven nations are the United States, West Germany, Japan, France, Great Britain, Italy and Canada.

U.S. officials have insisted that the dollar`s recent appreciation will not prevent further substantial reductions in the trade deficit.

Other members of the Group of 7 also are eager to maintain the calm in financial markets. A communique planned for release after Saturday`s talks will emphasize the progress made in reducing trade imbalances and the group`s success in promoting exchange-rate stability.

The low-key nature of the meeting will be reinforced by the absence of Kiichi Miyazawa, Japan`s finance minister, who indicated Thursday that he would not be attending. Japanese officials said that Emperor Hirohito`s condition and a tight parliamentary schedule made it impossible for Miyazawa to leave Tokyo.

Camdessus indicated that he expected little in the way of major initiatives to ease the debt crisis during the next week. But in the face of major demonstrations against the fund threatened by various coalitions of left-wing groups in Berlin, he made it clear that he was not prepared for the organization to be regarded as a scapegoat for the problems of developing countries.

Camdessus said the fund is developing a medium-term framework for its lending to indebted countries that would help ensure adjustment programs were not derailed by unforeseen developments such as rises in interest rates.

On the Commodity Exchange in New York, gold for current delivery rose to $399.30 a troy ounce from $398.40 Wednesday.

The U.S. bond market sank somewhat, with the yield on the bellwether 30-year Treasury issue rising to 9.04 percent from 9.01 percent Wednesday.